Fashion Nova pays $4.2 million to settle federal complaint online

The Federal Trade Commission takes action against companies that it finds violate the rules in the online review section.

In January, FTC officials announced a $4.2 million settlement with online fast-fashion retailer Fashion Nova, resolving allegations that Fashion Nova only issued four- and five-star ratings of ending 2015 to November 2019.

“This is actually the FTC’s first case challenging a company for not posting negative reviews,” said Amber Lee, an attorney with the FTC’s Advertising Practices Division. “We alleged that Fashion Nova’s reviews section suggested that it contained the reviews of all buyers who submitted a review online, when in fact, over a four-year period, it withheld hundreds of thousands of negative reviews.”

The FTC’s complaint says Fashion Nova used a third-party service to automatically post positive reviews on its website.

According to the FTC, anything below three stars would be subject to company approval, saying Fashion Nova hasn’t released any successful reviews for four years.

“It’s hard to get a full picture of how often this happens,” Lee said, “but that’s one of the reasons we’re bringing this case forward: to show the market that we’re taking this seriously. We want consumers to be able to shop online, especially now that consumers shop online so frequently, and to be able to check out the company’s website and get a full picture of what other consumers are saying about the product.”

In a statement, Fashion Nova called the FTC’s claims “inaccurate and misleading.”

“[Fashion Nova] immediately and voluntarily resolved the website review issues when it became aware of them in 2019,” the statement said. “Fashion Nova is very confident that it would have won in court and only agreed to settle the case to avoid distraction and legal costs. .”

Under the terms of the settlement, Fashion Nova will be obligated to post all customer reviews on its website, “except for reviews containing obscene, sexually explicit, racist or illegal content.”

According to the FTC, Fashion Nova is also prohibited from “misrepresenting customer reviews or other endorsements.”

A common problem for online consumers

“One thing this case illustrates,” Lee said, “is how difficult it is for a consumer to know if they’re getting the full picture by looking at a seller’s website.”

Although there is no data to indicate how many companies remove negative reviews from their website, a recent study by the World Economic Forum found that around 4% of online reviews may be fake.

The FTC advises consumers “to take their time and look at and compare reviews from a variety of sources,” Lee said. “We suggest starting with well-known sites to get credible and unbiased expert reviews.”

Marketing experts say that may be easier said than done.

“A lot of people are going to call my business and ask how they can get reviews taken down or removed,” said Cynthia Giles, founder of Cut Throat Marketing, which has offices in Colorado and South Carolina. “They want to know how Fashion Nova did. And I always recommend – don’t do that, people. Just be honest.”

Giles said that, in his experience, it’s “very, very easy” for businesses to buy positive reviews online. This creates a complex landscape that consumers can navigate.

“It’s not very common in service industries anymore because Google has cracked down,” Giles said. But on other major online marketplaces, “with the way their stores are run and set up, it’s very easy to buy reviews. You can literally go to certain websites and say, ‘I want to buy reviews. reviews,” and you’ll get people to bid on it. They’ll just sit there and keep leaving reviews.”

The practice can cost consumers dearly in the long run. In the ever-changing world of e-commerce, the review section plays a vital role in helping consumers decide if a product is worth buying.

54% of online shoppers read reviews on everything they buy, according to a 2021 survey. 25% say reviews play the most important role in their buying decision.

“If you absolutely have to buy online, I would go ask your friends on your social media platforms, ‘Have you ever bought from this company before?'” Giles said. “It’s very hard right now to tell you where to find honest reviews for these social media-based e-commerce fashion stores. It’s very, very hard to find honest reviews for them right now.”

The biggest problem

Aram Sinnreich, chair of the department of communication studies at American University, said exam programs play on people’s natural psychology.

“We tend to operate on what we call preferential attachment,” Sinnreich said. “If something is popular, that has to mean a lot of other people like it, and in turn, that has to mean it’s pretty good.”

This assumption, according to Sinnreich, “has been completely falsified online by the kind of fraud we see with various websites, creating platforms that allow people to improve their grades for money.”

The money often comes directly from consumers’ wallets.

According to estimates by the World Economic Forum, the online review industry generates $152 billion in spending each year.

“What we need is basically the equivalent of a bill of human rights, saying that data should not be manipulated and our decision-making processes should not be subverted by automated algorithms,” Sinnreich said. , outlining the need for policy at the state and federal level.

“You can’t have a democratic society, a fair and equitable society unless you’re sure the data means what it means,” Sinnreich said. “That he travels where he is supposed to travel and that you have a modicum of confidentiality in your dealings.”

To protect yourself

Ultimately, it is up to us to ensure that we are not influenced by bad actors online.

“Take your time to consult various review sources,” said Lee, who pointed out that fraud can be reported directly to the FTC online. “If you can, try to find well-known websites to give credible or unbiased expert advice.”

Some think it may be best to avoid the online market altogether.

“Buy your clothes locally,” Giles said. “Try to buy from a local store. That’s probably the best advice I can give you.”

About Nunnally Maurice

Check Also

A 21,000% rise in little-known AMTD Digital is the latest meme stock craze, analyst says

The wild swings in the stock price of a largely unknown Hong Kong-based fintech company …